What are the major types of costs which costs are controllable by the project manager?
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Well, now we know how Clint Eastwood feels about controlling movie production costs. For project managers, too, cost management is a primary job function, one that remains a focus through every stage of a project lifecycle. Along with scope, quality and
time management, it forms one of the three core functions of Project Management. Here is a video on Introduction to PMP® Certification Training. Hope you find it
beneficial. For those aspiring to pass the popular Project Management Professional (PMP)® certification, understanding the difference between types of project costs is critical. In this article, we’ve created an overview of project cost types and how they apply is various sample questions that
will help you prepare for the PMP certification exam. Read more: Here's what you should know about the PMP Exam Changes Types of Costs
Read more: How to Manage Your Time During the PMP® Exam Want to become competent in core project management areas? Check out our PMP® Certification Course Preview here. Sample Question and Answers1) John works as a project manager with ABD Consultants Pvt. Ltd. He felt a need to arrange special skills training for his team members for this project. What type of cost will he incur on the project for this training? Answer: A. The skills training to upgrade their
skillsets is directly related to this specific project, so it is considered a direct cost. 2) Bob needs to analyze project costing to find ways to decrease overall costs for a project. It would be advantageous for Bob to focus on: Answer: C. Direct costs and variable costs are costs that are directly attributable to the project or those that vary with the amount of work accomplished. Therefore Bob could analyze these costs to find ways to be more efficient and reduce them. 3) Various rooms in a building are being rented out to accommodate a group of workers during a project. These room rental costs are an example of: Answer: B. Costs incurred on room rental are considered fixed costs. ConclusionWhen creating estimates on a project, project managers must fundamentally understand the types of costs incurred. The PMP® certification exam will be sure to have many questions on the topic, so be sure you have reviewed each type of project cost and be able to determine which type of cost is used in different scenarios. PMBOK®, PMP® and PMI® are registered trademarks of the Project Management Institute, Inc. Gain an extensive understanding of project management and learn how to manage complex ones with our Project Management training program now! What are 3 ways a project manager controls costs?The process of managing project cost control can be carried out in three steps. Estimating and planning the cost. Developing a project budget. Controlling spending and tracking costs using advanced tools in real time to ascertain that there are no unexpected cost changes.
What are the 4 types of cost?Costs are broadly classified into four types: fixed cost, variable cost, direct cost, and indirect cost.
What are the type of cost in project management and explain each types?They typically fall into two categories: Direct costs: Examples of direct costs include fixed labor, materials, and equipment. They are typically one-off costs that come from a single department or the project itself. Indirect costs: Examples of indirect costs include utilities and quality control.
What are the costs involved in a project?Project costs involve: Direct costs - Direct costs are those directly involved with, and necessary in order to complete said project. Indirect costs - Indirect costs for a project are costs which do not directly lead to project completion but are still vital for the company or individual working on said project.
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